June 16, 2018
The Treaty 6 Embassy was supposed to represent the very best the Onion Lake Cree Nation had to offer. With a museum, a "grand foyer" and a council chamber, the facility would allow the band and other Treaty 6 nations to represent themselves to the world.
But six years after ground was broken, the partially built facility sits in the midst of a weed-infested field and some of the $10.5 million the band allocated for the project has disappeared.
That $10.5 million is just one of 14 concerns outlined in a leaked September 2017 letter from the band’s auditor to the chief and council. The letter says the concerns had been raised with the auditor by Onion Lake chief and council and senior band officials. Among the other issues flagged were:
- An investment in a New Zealand technology company executed with a “poor investment strategy” and the subject of “rumours of kickbacks.”
- An international ambassador for Onion Lake connected to a company registered in the United Arab Emirates, which appears to have been inquiring about making investments in African diamond mines.
- Concerns about a possible "kickback of $5,000 per home from a Ready to Move home dealer” building a subdivision on reserve.
According to the letter, the auditor undertook the review at the request of the band’s leadership.
“We understand that Onion Lake Chief and Council are concerned that business or personal transactions might be made which are not in the best interest of the nation, and concealed in its financial reporting, and wish to understand whether there are any current fraud risks which should be mitigated,” the MNP auditors wrote.
Band member and activist Charmaine Stick is furious at the litany of problems flagged in this report because, if the allegations are true, it would mean millions of dollars have gone missing while some of her people have lived in poverty.
“Why do we still have a housing shortage? Why don’t we have anything out there for our children?” Stick said. “Where’s all our money going?”
She said she’s baffled by this audit request because so many of the problems directly relate to decisions by that very chief and council.
"We need to clean up our mess."
“Why are they digging into it now when they’ve known all these past years what was going on?” Stick said. “Why did they decide to do this now?”
In an email to CBC, Onion Lake said the auditor's letter is a confidential draft “which is not to be disseminated or disclosed to the public” but is meant for the chief and council alone. The letter goes on to say “many items in the report will undoubtedly require amendments, furthering discussion and deletions.” The band threatened legal action if CBC reported on this document.
A long battle for transparency
Stick said she suspects this fraud risk assessment might have been prompted by a recent court case she won against her own band in which the court required the First Nation to release its audited financial statements, in compliance with the First Nations Financial Transparency Act passed in 2013.
For years the band had steadfastly refused to comply with the law. It took the federal government to court in 2014, challenging the constitutional validity of the law.
Chief Wallace Fox argued then that the Conservative federal government was, “trying to impose their misguided agenda on our peoples.” Fox also wrote to the United Nations arguing the law violates longstanding treaty rights.
Stick fought back against her own leadership, holding a 13-day hunger strike calling for transparency.
“This is our information. We’re entitled to it. They always say that at band meetings. And they always say that to the outside world. So where is it?” Stick said.
The hunger strike didn’t work, so she turned to the Canadian Taxpayers Federation (CTF) for help. The CTF funded a court challenge that was ultimately successful in forcing the release of the band's financial statements.
Todd MacKay with the CTF echoed Stick’s view that the victory may be what prompted this audit.
“When people know that somebody’s going to be checking up on them they tend to do a better job of making sure they’ve got their house in order and they're definitely more prone to look for problems that need to get fixed,” he said.
In the lead-up to the June 2012 embassy groundbreaking ceremony, Chief Fox said “the long term objective is to have an embassy that will have a voice and a seat at the United Nations in Geneva,” according to a report by MBC News. A band news release said 500 people, including an official from the United Nations, were there to witness the event.
Six years later the embassy building is little more than a foundation full of water and rusty beams, surrounded by weeds.
“To be honest, I’m embarrassed,” said Stick as she leaned against the partially built facility, which sits within eyeshot of the reserve’s main intersection.
The internal letter from the band’s auditor says some of the $10.5 million allocated for the project has been diverted.
“The monies that were withdrawn from the Nation’s capital trust and earmarked for the construction were put into the operating account of the nation and used,” the letter says.
“There are no monies available for the completion of the project.”
“They say there's no money. Ok well where did that money go then?” said Stick.
African diamond mines and a mystery ambassador
MacKay said one of the issues raised by the auditor struck him as an “odd joke” which he would never have believed unless he had seen it in print.
“If I had seen it on any document other than one with a high profile auditors letterhead on it I would assume this is one of those made up email chains that everyone throws into their spam folder,” said MacKay.
The letter says that in 2014 the band appointed Niharika Gautum as an “Ambassador for the Nation.”
According to an Order in Council found on the band’s website, the chief and council authorized her “to represent, speak, negotiate, and act in [Onion Lake’s] best interests, subject to the direction of the Chief and Council.”
“Your assigned nations and organizations of representation shall include nations worldwide, as well as the United Nations and other international organizations.”
Stick said this revelation was news to her.
“The problem with that is they didn’t ask the membership if we give our consent to have her represent us,” Stick said.
According to Saskatchewan’s corporate registry, Chief Fox and Gautaum, whose address is in New Delhi, India, created a company called Onion Lake International Trade Corporation in 2015. The registry says the company is involved in “business development and consulting in the oil and gas industry.” Gautaum is listed as the president and Fox as the vice-president.
The audit points out that there was a company by the same name registered in the United Arab Emirates. It says that corporation “inquired about making investments in diamond mines.”
“The Nation was advised by email that the African country was seeking to understand that relationship,” the letter says.
“There’s nothing but questions about this and every word in that document just makes you shake your head,” said MacKay. “What in the world is going on here? Maybe there a good explanation but I can’t even think of one in my wildest dreams.”
‘Rumours of kickbacks’
The auditor is also investigating an investment the band made in KKLP, a technology firm located in New Zealand.
“The investment performed poorly however there are rumours of kickbacks, payments and poor investment strategy with Nation funds,” the letter says.
The auditor also raised potential kickbacks with relation to a subdivision development on reserve called the Sunrise project. There were allegations of kickbacks of $5,000 per ready to move home. The auditor indicated the transactions involved a company receiving "$80,000 in 2012 from unknown sources."
MacKay said the allegations here are particularly alarming because of the great need for housing on reserve.
“There are a lot of people in Onion Lake Cree Nation who are living in poverty — whose homes are badly substandard,” he said. “Any housing project that goes forward is urgent and is critically necessary to the wellbeing of average band owners.”
Mortgage loans for band employees
The band also has provided some band members, including the chief, $20,000 loans to help with new mortgages. The money was provided on the condition that the home had to be retained for a period of 10 years.
The auditor’s letter notes that some people, including the chief, did sell their home prior to the 10 year period expiring.
“MNP will investigate those homeowners that the nation feels are political, controversial or which may require a level of independence.”
Stick points out that band members can’t own property on reserve so these mortgages must have been for off-reserve property. She said she’s surprised to learn the chief had a second home, in addition to the one he lives in on reserve.
“As far as we knew he only had one home and that’s the one he’s living in right now.”
A lack of accountability and due diligence
The letter also outlines a host of areas where there are concerns about financial oversight and due diligence.
- Two band members were terminated after they exploited an apparent flaw in the payroll system for their own financial benefit.
- A band employee was terminated after racking up $12,000 in personal expenses on a band credit card.
- A senior band employee took $1,500 that was supposed to go to an elder for herself. The employee was terminated and received a settlement. The band appears to have entered into “a non-disclosure agreement not to pursue charges against [the woman] in relation to this matter.”
- There are concerns the band doesn’t have “a comprehensive understand of own source revenue; profitability of the business units and work plans or deliverables.”
- During Canada Day 2016, the band handed out $200,000 in cash to participants in events and “the committee responsible did not conduct good book keeping and there is concern that there are monies unaccounted for.”
- The Justice department has a $2 million budget but “there is little accountability to the chief and council on how the money is spent.”
- There are concerns that the band’s housing department “does not conduct proper due diligence, does not prepare request for proposals, does not conduct contract review… and does not have a good understanding on prioritizing housing repairs.”
- The First Nation has made loans to band employees, including chief and council, that were to be repaid through payroll deductions. It used to be that chief and council would receive monthly statements about those loans but for some reason “this no longer takes place.”
- People in the community are concerned they don’t have enough information about investments made by Witten Trust, an organization run by the chief and council.
CBC has not been able to determine whether any of the concerns raised by the auditors in their letter are supported by evidence.
The auditor says once it’s done a review of all of these issues it will have to decide on next steps.
“In some cases, this review will result in a conclusion of the matter. In some cases, the review will identify the next steps to be undertaken. Those next steps will be presented to chief and council for consideration,” the auditor explains.
Stick said it is a terrible idea to allow chief and council to review the auditor’s findings in secret.
She said the problems happened under the watch of the chief and council so in her view it makes more sense to take the final report to the band’s membership “rather than going to the perpetrator and saying ‘How do you want me to deal with your perpetration?’”
Frustrated with being left all alone
Stick said initially she was skeptical about teaming up with the Canadian Taxpayers Federation against her own band. But she decided she didn’t have any options and she’s happy she did.
“This is what reconciliation looks like. We’re working together on something. We’re setting aside our differences and we’re coming together - working together to have a positive end result,” she said.
She said it’s been a long fight and there is still a long way to go.
Stick said she’s had some success because of her persistence but she hasn’t been getting much support. She said she’s reached out for help to the Federation of Saskatchewan Indigenous Nations and the Assembly of First Nations but didn’t get much.
“This is what reconciliation looks like."
She said she was also frustrated by Ottawa’s response.
“Basically their answer was ‘Oh we only oversee chief and council. We can’t help you in this matter,’” she said. “Why not? This is about the chief and council you say you watch over.”
Stick said her chief and council are being hypocritical by forcefully demanding fair treatment from Ottawa but not treating their own people fairly.
On Monday, the band has an election for a new chief and council. Fox is not running this time around. Stick says this is an opportunity for Onion Lake to turn a new page.
“We need to clean up our mess. We need to do what we’re asking of the outsiders. Let's do it ourselves here first,” Stick said.